What is Social Value? And How Can I Measure It? (Updated for 2025)

At Thrive, we help companies plan, measure, and report on the social value created by their work. But what is social value?

Defining Social Value

Professional body Social Value UK provides the following definition:

“Social value is the quantification of the relative importance that people place on the changes they experience in their lives.”

The social value an organisation creates goes beyond the money it spends or the profit it makes to encompass the impact it has on the wellbeing of people, communities, and places.

Let’s Start with an Example

Suppose a local council is looking to improve library services in its area. It will be faced with choices about how it can go about doing this.

One option might be to sell a local park to a multinational contractor, which will build and fit out a concrete box building using its existing workforce and suppliers, and then subcontract the management to a global services company.

An alternative approach might involve:

• Consulting with local people about suitable disused premises or brownfield sites that could be redeveloped
• Consulting with affected communities about the sort of services they would prefer to use – perhaps online or mobile library services would be of greater local use
• Making sure that local businesses benefit from the work, as contractors and suppliers
• Insisting that local people – perhaps from disadvantaged or hard-to-reach groups – are taken on or trained as part of the project workforce
• Adopting a carbon neutral design
• Making the new facilities available for use by community groups outside of opening hours

The first option could well be cheaper or quicker to finish. But the second generates a whole host of additional benefits for people in the local area beyond simply “getting a new library”.

In fact, in our example above:

• The second approach generates positive social value by boosting the local economy, promoting community participation, protecting the environment, etc
• The first approach not only doesn’t provide these public goods, but it also destroys social value – by taking away the wellbeing benefits of the local park that was build on in preference to redeveloping a derelict site

So why are we interested in it? Social Value UK goes on:

“Social value measurement tries to understand and record the relative importance we place on the wellbeing changes we experience. It helps to inform better decision-making to increase positive change, and decrease the negative. Social value measurement goes beyond financial or economic value and tries to capture social impact in the round.”

Where Social Value Came From

You can read our complete history of social value if you want the full story, but it might be handy at this point to go back to the Public Services (Social Value) Act 2012 which introduced the term into the field of public procurement in the UK.

When a public body spends money on goods and services, the Act says that:

“The authority must consider—

(a) how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and

(b) how, in conducting the process of procurement, it might act with a view to securing that improvement.”

This put onto the statute book for the first time a potential solution to the age-old problem of making sure that public spending does as much good as possible.

It’s important to add that social value is not exclusively concerned with public procurement. Voluntary organisations, social enterprises, charities, etc, were all working to achieve these ends long before the phrase was coined. And plenty of businesses aim to do good in the world as well as make a profit.

Social value is most commonly talked about in public procurement contexts, but it’s our belief at Thrive that social value is just as applicable to other environments where there is a need to measure and quantify impacts as well.

Where Social Value is Now

Up until 2021, interpretation of what social value meant in practice and how to consider it was left fairly open. Many local authorities in particular began using their own systems and co-ordinating them under the supervision of the Local Government Association.

But everything changed when PPN06/20 and the Social Value Model came into effect in January 2021. We’ve written about these in detail elsewhere, but the headline impacts were:

• Central government departments and their agencies (and latterly the NHS) are obliged to give at least 10% weighting to social value in assessing bids for contracts (see PPN06/20)
• Extensive official guidance on what social value should mean – in terms of policy objectives to promote, metrics to track and report on, and how to prepare tenders and bids – was made available

PPN06/20 is set to be replaced by a new Social Value Model, PPN02, by October 2025. While the headline effects (above) aren’t changed, there are some important differences to note:

• PPN02 incorporates and is based on the contents of the Procurement Act 2023
• It reflects different political priorities for public procurement, set out in the National Procurement Policy Statement published in February 2025 – with knock-on effects for Model Award Criteria (MACS) and recommended metrics (we compared and contrasted the two Models here)
• The new Model Social Value Question that contracting authorities will put into tenders seems to ask for a lot more detail around how social value will be delivered and how it will be reported on

Between February 24 2025 and September 30 2025, we’re in a hybrid situation where contracting authorities can decide whether to use PPN06/20 or PPN02 for new procurements. PPN06/20 continues to apply to all contracts procurement processes – including frameworks – in progress before 24/2/25, when the Act took effect.

Measuring Social Value

It should be clear where the drive to measure and monetise social value comes from: if you’re looking to compare outcomes and impacts or make sure that what you’ve been promised has been delivered, you need a “common currency”.

One approach that has been taken to this need is the idea of Social Return on Investment (SROI) – defined by Social Value UK as:

“A system of accounting for all of the social and environmental value of your activities.”

This idea has been developed significantly over the years, most notably – in the UK – in HM Treasury’s Green Book and its offshoots.

The value economics embedded in the Green Book forms the basis of the social value frameworks we see in place today, like the Impact Evaluation Standard.

A social value framework aims to assign values – often monetary “proxy values” – to the impact of social interventions as a way of making SROI more accessible, easier to use, and less tied to specific contexts.

Not every impact can be monetised though. Frameworks have to strike a delicate balance between over-simplification and crudity on the one hand, and an excessively “qualitative” perspective on the other.

Of course, there will always be debates around the relative values assigned to different impacts – and those are bound to evolve over time.

Social value is a living subject that will continue to mature and develop, with practice and with changes in the external environment.